BBRY Trumpets Best Ever Canada Sales: Street Debates Z10 Sales

By Tiernan Ray

The Street today has is reviewing the numbers for initial sales of BlackBerry‘s (BBRY) Z10 touch-screen handset, the first BlackBerry to run its BB10 operating system, unveiled last Wednesday. The Z10 went on sale in the U.K. the next day, and in Canada yesterday. CEO Thorsten Heinsyesterday told the Associated Press that some smartphone users in the U.K. are switching from other devices to the Z10.

RBC Capital’s Mark Sue, who has a Sector Perform rating on BlackBerry shares, writes that the Z10 is “off to a good start”:

Checks at 40 stores in Canada indicate sell-through of the BlackBerry Z10 smartphone is strong on its launch day, with numerous stores selling out towards the end of the day. Z10 pre-orders reached record highs (for BlackBerry). Supply appears limited, with stores allocated avg. 5-10 units/store for walk-ins and est. 20-30 units/store for pre-orders […] Sell-through of the BlackBerry Z10 in the UK is exceeding RIM’s expectations, with some stores sold out as well. The Z10 now ranks #4 on uSwitch UK’s website ahead of the Nexus 4 and Lumia 920 (#1 remains iPhone 5). BlackBerry will launch the Z10 in other parts of Western Europe this week. Bear in mind however, BlackBerry’s presence in those countries combined is less than its sub base in the UK […] here appears to be meaningful enterprise demand for BlackBerry Z10 and Q10. Enterprise upgrades may be delayed several months, given enterprise testing and certification, but RIM’s free software upgrade and early training may accelerate the process. Non-regulated industries may use Microsoft ActiveSync (not good for RIM’s service revenue). BBM and SMS archiving is currently unavailable (expected in 1-2 months), which may delay initial BB10 uptake among some users.

But Canaccord Genuity’s Mike Walkley, who has a Sell rating on the stock, is less sanguine. He writes that his “surveys” of the U.K. suggest a “mixed” view:

limited initial supply was cited as the reason for early post-launch stock- outs at some carrier stores versus overwhelming demand. In fact, our surveys indicated most stores received less than 15 units and sold a majority of these units over a two- to three-day period, leading to initial stock-outs at a few stores and low inventory levels at others. Our surveys revealed that while most sales representatives acknowledged the Z10 was a marked improvement versus older BB 7 devices, initial sales were driven by pent-up demand from loyal BlackBerry users. Store managers also suggested the new BB10 platform only closes the gap with more mature OS ecosystems such as Android and iOS, and a number of store representatives recommended competing high-end smartphones such as the iPhone 5 and Samsung Galaxy S III over the Z10.

And Pacific Crest’s James Faucette, who has an Underperform rating on the stock, writes that “If Z10 sales continue to develop as we expect, U.K. shipments imply a global quarterly run rate of 1 million to 1.5 million; we believe that would be disappointing.”

Writing that he has been “canvassed retailers across the United Kingdom for five days,” Faucette concludes that “BlackBerry seems to be following a strategy of deliberate scarcity for the Z10, similar to what other manufacturers have done in recent high-profile launches”:

The launch of the Z10 has shown more early demand than other high-profile but ultimately severely disap- pointing launches in the past few years. In those cases, there was excess inventory by the end of the first full quarter of shipments […] Using normal rates of decay and early results in the United Kingdom, we estimate the Z10 will be on a quarterly run rate of approximately 100,000 to 150,000 there exiting the February quarter. The United Kingdom has accounted for approximately 10% of BlackBerry sales over the past few years, which implies global demand of roughly 1 million to 1.5 million units per quarter which we believe would be a disappointment. Further, we would note that given the Z10’s high price point, we believe the U.K. could end being a higher percentage of the global market for the Z10 than for BlackBerry overall.

Update: BlackBerry released a statement a short while ago quoting CEO Heins saying sales of the Z10 in Canada were the best ever for a BlackBerry product debut:

“In Canada, yesterday was the best day ever for the first day of a launch of a new BlackBerry smartphone. In fact, it was more than 50% better than any other launch day in our history in Canada. In the UK, we have seen close to three times our best performance ever for the first week of sales for a BlackBerry smartphone.”

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There are 23 comments

FEBRUARY 6, 2013 11:26 A.M.

lol wrote:

bunch of bashers following each other working hard to lower the price.

FEBRUARY 6, 2013 11:26 A.M.

DrMichaelJames wrote:

James Faucette's logic seems a little skewed. The phone went on sale in the United Kingdom on January 31. While there may only be 150,000 units sold to end the quarter (BBRY's quarter ending February 28), it does make sense to use this data as the variable for an international multiplier for units per quarter. One could argue that the 150,000 units sold in the first month should resonate with quarterly demand of 4,500,000 units when using the 10:1 multiplier. This equates to 18,000,000 units for the year, which is what most analysts declare as the breakeven point for BBRY. Also not taken in to account, is that many BBRY users, and other potential consumers, are waiting for the Q10.

FEBRUARY 6, 2013 11:31 A.M.

Anonymous wrote:

I'm an iPhone5 user and I really want to switch back to Blackberry.. Typing on the iphone just sucks and I really don't care about the 200,000+ apps.. I've 14 apps on my phone and I'm pretty sure they are basic apps that BB has, so this is a no brainer for me. I just hope I can sell the iphone 5 for a good price and buy BB 10 and say good riddance to the iJunk

FEBRUARY 6, 2013 11:38 A.M.

bingo wrote:

Thanks for bashing the stock one again so we can load the boat a little more. Moving to see how the sponsored experts are desperately uniting their efforts to downgrade a phone that is set for success. Suffices to check the pre orders. Good trading everyone

FEBRUARY 6, 2013 11:45 A.M.

Westfella wrote:

Beyond guessing numbers and speculation, Bell Canada the second biggest wireless says it has a record orders. Conspiracy again? If you follow the pattern of all who says BB will fail, they all advise to get out or sell short. They are just trying to keep their customers and jobs.

FEBRUARY 6, 2013 11:59 A.M.

Rogers Guy wrote:

We received full stock orders of BB Z10 for stores, which out classes IP4s and IP5 who can never fulfuill stock orders. BB Z10 has destroyed Samsung S3 launch numbers and is comparable to IP5 on first day.
Only company I see being hurt by BB is Apple, as sales in Apples are way down, we are even offering $0 IP4s, which means Apple is clearly desperate.

FEBRUARY 6, 2013 11:59 A.M.

Valery wrote:

This clown James Faucette need to come back to 5th grade math. There were report that Z10 has sold over 100K in the first 5 days. (some of them estimates even more then 200K). How he estimate this number for the quarter?. Even thought 50% pre-orders and say just 10K per day run rate for the future , makes 900K units in a quarter..

FEBRUARY 6, 2013 12:08 P.M.

Anonymous wrote:

Look at these bashers like Tiernan and Savitz working overtime to bash BBRY and STILL failing...if that doesn't tell you that BBRY is a smashing success, I don't know what will..

FEBRUARY 6, 2013 12:12 P.M.

Christian Charron wrote:

I totally agree with Michael James. The logic of Faucette is skewed. This guy just want to push the stock lower. Incredible.

FEBRUARY 6, 2013 12:21 P.M.

Anonymous wrote:

If they sell 1.5 million in the first Quarter...that would be without US sales as they don't. Launch until after quarter ends....analysts are not very good with math.

FEBRUARY 6, 2013 12:35 P.M.

freddysrevng wrote:

Apparently, they aren’t allowing comments on Eric Savitz (Tiernan’s replaced him here at Barrons) Forbes page because that dork is being “pounded” every time he comes up with some drivel bashing of BBRY. He has not received the memo that that is soooo 2012.

Anyway, here was my response to his latest “analysis” on another iTard analyst’s confusion about what is going on with BBRY and its stock…. Enjoy….

Professor Savitz – Did Faucette call the “TRIPLE” on BBRY?….. No? …. Then why is his opinion worth anything on where BBRY will go from here?

Go back to you “Binders of iTard/BBRY Bashing Analysts” and find one who was, even, close to “calling” what has happened to BBRY since $6.23.

Go on…. run along… Come back when you have one….

ENTER BB 10 …….

FEBRUARY 6, 2013 12:40 P.M.

freddysrevng wrote:

OK so follow this. These iTard analysts are attempting to lead you to believe that BBRY "missed the holiday season to launch", in order to, come to market with an inadequate number of phones......

But, the 2nd largest carrier in Canada said that Z 10 sales set "all kinds of records".....

So you have to ask yourself..... Do you trust the carrier or some iTard analyst who has now missed a "TRIPLE ON BBRY" and really looks incompetent in his job by hyping AAPL from $705 to $430?

Pick your poison.

ENTER BB 10 ....

FEBRUARY 6, 2013 12:55 P.M.

mcmairtime wrote:

James Faucette,
you can skew the number of z10 sales all you want, bottom line is this. People want something new, the z10 is a SICK!!!! looking phone and as well faster, yeah you may be thinking looks don't matter... bull!, they do. Image says alot these days and Iphones are run-of-the-house whcih is why everyone has one and their Grandma (literally) has one. I traded my Iphone for a Lumia 920 and will be looking to get the new z10 in march. Apple trend is near the end!

FEBRUARY 6, 2013 1:28 P.M.

Kurt wrote:

The logic Faucette uses is flawed as well....his numbers for sales percentages are based on BB7 sales #'s. BB10 is a new ball game.

Most "analysts" fail to understand the upgrade potential within the subscriber base (80 million globally) as well as the defection rate from Droid/iOS.

If you had listened to the analysts cited in the article you would have bought Apple at 705 and NOT bought RIM at 6 bucks??

FEBRUARY 6, 2013 2:24 P.M.

FaucetteSuckIt wrote:

Faucette and Walkley are both iMorons to the core. They still have time to jump ship from Crapple to Blackberry. It's still not too late. Once the keyboard version is out, BBRY will go through the roof and Apple will come back to earth. iPhone is stale and soo dead.

FEBRUARY 6, 2013 2:35 P.M.

Anonymous wrote:

Wow,Pacific Crest’s James Faucette, already after a feel days of sales what the total quarterly global sales are going to be. All of this from talking to some store managers. Why oh why do such people have a stage. Rhetoric not analysis.

FEBRUARY 6, 2013 2:42 P.M.

freddysrevng wrote:

Statement from Thor, today, to iTard analysts everywhere:

"In Canada, yesterday was the best day ever for the first day of a launch of a new BlackBerry smartphone. In fact, it was more than 50% better than any other launch day in our history in Canada," said Thorsten Heins, President & CEO of BlackBerry. "In the UK, we have seen close to three times our best performance ever for the first week of sales for a BlackBerry smartphone."

ENTER BB 10 ....

FEBRUARY 6, 2013 9:28 P.M.

Winter_hat wrote:

I'm new to stocks. Does this blatant misinformation, if not outright lies, tend to work? The people are speaking with their purchases, they are not reading these articles. It's going to be a big hit no matter how hard you stomp your feet and moan about it.

FEBRUARY 6, 2013 10:55 P.M.

Jim Cramer wrote:

Stock Manipulation:

Very well known person says that he use to lie to manipulate shares of RIMM ... and BOZO reporters would listen to him and report what he said. This is a MUST WATCH:

Vippennystocksite Dotcom (Dot means .), is a fabulous and fantastic place for BBRY stock

FEBRUARY 7, 2013 9:31 A.M.

the headless lizzard wrote:

"store managers said..."
Under this, you can put anything serves your daily interest.
In this case Mike Walkley has a Sell rating, so go figure.

FEBRUARY 7, 2013 10:12 A.M.

Marc wrote:

Hello from the UK! My g/f upgraded to the new Blackberry 2 days ago from an Iphone 4. She absolutely loves it. I have been a previous BB user (Bold 9000) and using the new phone for messaging and the general interface reminds me just how dated the Apple OS feels. I have an Iphone 4 too and I am now thinking why have I been "putting up" with it's flaws. BB may not be as prominent as the other platforms but why not embrace that!? The app store seems to be growing on a daily basis and all the popular apps are there already. 2013 is said to be the year of the "Phablet" but for those who don't desire such a vast device the new BB 10 is a good looking &b premium handset - it's superfast, intuitive and I know that my next phone will be one of these - I just cant decide if I want touchscreen or querty!

FEBRUARY 9, 2013 8:53 P.M.

ATInsider wrote:

What's with these bias articles? BLACKBERRY 10 is superior in every respect against Apple and Android. It all comes down to educating the public.
Obviously you will have a number of iBots and Droids manipulating the true facts by recommending iPhone and Androids.
I don't get people like this, the type that choose to block progress and innovation. This is BlackBerry's time to shine, and they will because they have the best mobile platform in existence.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.